I think Zara’s integration of data with supply management could provide a example of how traditional brick-and-mortar stores could respond to the e-commerce disruption. However, is Zara successful because of the special attributes of the fast-fashion industry? Could other traditional retail businesses, like Wal-Mart, that could do what Zara is doing and be competitive enough to make its brick-and-mortar stores profitable despite the sales-loss that is being taken away by e-Commerce?
Following Noam’s comment, how expensive would it be to build your own algorithm? With data-science being the trend right now, I don’t think it would be very hard to either build your own team or outsource to a data-focused software company to build such a algorithm that detects differences in images. If this is the case, how could Applied Materials leverage its first-mover advantage? Through network effects of its existing customer base?
Couldn’t agree more with some of the comments above regarding the fierce competition in this space and how company will differentiate themselves in this space. Other than price, what other metrics could these companies compete on? What kind of network effects could Tableau utilize to increase switching cost or prevent its customers from multi-homing?
Also, I wonder how hard it is for a software driven company to just add product features and service technologies and start competing for market shares in other businesses’ space.
Definitely agree with you on the whether the tastes of the Amazon users is reflective of the general audience. In general, I think, the Amazon users who review and rate these pilots are probably more of the extreme users who probably have a little different taste than the public.
Do you think is there another way for Amazon to allow more of the general public to filter its content? Or should they?
Agree with you that crowd-sourcing will not be the future for big block busters, but I do think that it has a market for niche markets, and because there are so many niche markets out there, do you think one could aggregate all of them unto one platform to make it the place to go for specialty films? Another point I would like to make: I think the technology in graphics and production will have huge impact on this market. It is conceivable that one day that someone in his/her basement, with the right skills, could produce pictures and sounds that could match what Hollywood could do, and then big production houses will have one less edge than these smaller players.
CX, thank you for your thoughtful questions.
I definitely think more could be done to leverage crowdsourcing, beyond just marketing. Users who participated in the content creation process can be great ambassadors for its movies, since I would assume people who are reviewing and rating movies on Studios tend to be more extreme users, they probably have a social circle that are more into movies and TV’s than the average. Additionally, I think data analytics could be applied to this crowd to derive insights what part of a movie/TV show that is being liked/disliked by the crowd.
As for what kind of mistake it is, I’m not really sure… Happy to hear other thoughts.
You should read my take on the Lending Club as well!
I think the peer-to-peer lending platforms could be a potential way of the future for banking, where people no longer need large infrastructure to access capital, and other collaborators, such as financial advisers, could come into the platform and add more value to the job.
I wonder if the traditional banks see the threat of a peer-to-peer lending platform as substantial, and how would they respond to it.
I wonder, with not-for-profit platforms such as EdX that are so effective, would there still be a space for for-profit online education? Could a private company try to capture value if they created such an open platform? What if EdX started charging its users money? Would it be an effective education platform?
Great article. Although I’ve never played WoW, but I can imagine how addictive the game could be just by hearing about it. Also, interesting take on the FTP model. This model seems to be the way of the future for many games, but I wonder if it’s necessary for Blizzard, with its huge brand equity in the gaming industry, to make such a move.
Definitely agree with you on the lack of innovation for PayPal, but I wonder if it’s still too late to save themselves. PayPal’s inertia, although slowing, is still huge: eBay is still one of the predominate website for online retail, and as long as PayPal is its “official” payment system, people like myself will use it. Unless I’m really missing something here, but I can’t think of an instance where I used something other than my credit card information or PayPal for all of my online transactions. I don’t even know if Venmo can be used for shopping online?
Definitely did not think Wal-Mart as a digital innovator, so thank you for bringing that to my attention! Now, I wonder, how much digital innovation does Wal-Mart really need? Do you think that physical grocery stores will ever go away? I gut feeling is no, at least within my lifetime, because I personally still like to shop for my groceries in a physical location; there is just something about ordering bananas or apples from a website that doesn’t sit right with me, even though I order almost everything else from Amazon or eBay.
Valve and Steam sure have created a lot of value for the gaming community, but I wonder how much of that value are they capturing? How are they monetizing games purchased by a player from a developer? And if more and more players are downloading Mods, will Steam be able to capture any value there? Lastly, how hard will it be for someone else to replicate an engine like Steam?
Great post! I actually wanted to write a post about Netflix myself, more focused on its content creation business. More specifically, I wanted to ask whether the current Netflix model of collecting consumer preference in creating content will be the standard for future story-telling, if so, how will the traditional Hollywood firms do it?
Currently, the Hollywood movie studios such as Legendary Pictures are using data to allocate their marketing spending more efficiently instead of creating contents. However, in order to create stories based on data, a company will need a platform to which it can collect the types of content that its consumers are watching. To this point, though, the Hollywood studios do not have such platforms; these platforms belong to the “tech” companies such as Netflix, Hulu, or Youtube.
Then my question is: how should these traditional movie studios respond? Should they partner with these online streaming services? Or should they just stick to their original model of having “true” story-telling artists create the original works. Also, if future content does take on the model of taking existing preferences of consumers, then will there ever be true innovation in story-telling?